COVER STORY NSW electricity grid now at 'crisis point'

by Peter Westmore

News Weekly, June 30, 2018

Severe power shortfalls have hit New South Wales for the first time, as the impact of the closures of coal-fired power stations in South Australia and Victoria is compounded by maintenance issues at power stations in NSW.

Australia’s largest aluminium smelter, the Tomago Aluminium plant (pictured) near Newcastle in NSW, which has operated 24 hours a day for over 30 years, was forced to turn off electricity to its potlines three times over four days early in June, as prices spiked due to power shortages.

Tomago chief executive Matt Howell warned that the country’s power grid was at “crisis point”.

“This is the likely future of our energy grid as once-reliable base-load [coal] generators exit the National Energy Market and are mostly replaced with intermittent wind and solar projects with no practical storage to speak of,” Mr Howell said.

“If we want to be a nation that makes things, rather than one that imports all of its needs, we must have internationally affordable and reliable energy: a system that can reliably deliver, independently of the weather.”

Large exporter

The Tomago plant has a production capacity of about 590,000 tonnes of aluminium a year, is a major employer in central NSW, and is a large exporter of aluminium.

Mr Howell told the Financial Review: “Of course, in an emergency we can and will curtail the potlines to preserve system security. It is in our interests to do that but those times should be extremely rare.

“It is becoming the norm and it is an illustration that we have hollowed out our base-load generation capacity. We are replacing it with weather-dependent resources. That is not a sustainable solution.

“We are calling for greater investment in and certainty in base-load generation for those energy-intensive industries like ours that need it to survive.

“We simply cannot survive on variable wind and solar. There is no aluminium smelter anywhere in the world powered by wind and solar, and backed up by batteries.” (AFR, June 9, 2018)

The problems in NSW were unexpected. Usually, power shortfalls occur in summer when electricity demand is highest.

What happened in NSW was that scheduled closures of power plants for maintenance coincided with outages at the Mount Piper and other NSW power stations. Victoria, which usually supplies electricity to NSW when there are shortages, had none to spare due to high demand during cold weather.

The Australian Energy Market Operator (AEMO), which has responsibility for maintaining secure and affordable energy, responded to the situation by calling for a permanent strategic reserve of power, and increased power to deal with shortages in the system.

However, major energy companies, including AGL, which has foreshadowed the closure of the huge 2000 megawatt Liddell coal-fired power station in 2022, and refused to sell the plant to Alinta Energy, have rejected the plan.

The problem facing the electricity system is a direct result of Australia’s surrender to pressure from the Intergovernmental Panel on Climate Change (IPCC) to cut carbon-dioxide emissions in an effort to stop global warming.

The closure of large coal-fired base-load power stations, and their replacement with energy from renewable energy sources such as wind and solar, is central to this project.

The fact that global temperatures, as measured by satellites, have barely changed over the past 20 years, despite the hysterical claims by climate alarmists, shows that the effort to control climate change is unnecessary (and probably impossible, in any case).

One problem with renewables is that they are both intermittent and unreliable, and have introduced great instability into the electricity system.

AEMO referred to this in its recently published reference paper, Power System Requirements (March 2018). It wrote: “The NEM [National Energy Market], like power systems worldwide, is being transformed from a system dominated by large thermal [coal-fired] power stations, to a system including a multitude of power generation resources and technologies of various sizes.”

It added: “While the power system is being transformed, the laws of physics that determine electrical flows do not change. To maintain a secure and reliable system, a range of interdependent technical and operational needs must be met at all times.”

AEMO explained the problem with reliance on intermittent electricity sources in the paper.

“This work culminates in the continuous matching of supply with demand and constant provision of essential voltage and frequency management services, ensuring sufficient reserves so the power system is robust enough to cope with unexpected events and stay within the power system operational design limits,” it wrote.

“Unexpected events have the potential to compromise the operability of large parts of the power system, with potential consequences including cascading failures and widespread, prolonged supply disruption.”

Separately from this, base-load power stations are far cheaper to operate, so the effect of an increased reliance on renewables is that power prices have risen substantially.